Enter this very enlightening piece from Peter Pomerantsev in the London Review of Books. The premise is what Russians refer to as the “Sistema”:

There are any number of paths and initiations into sistema, the liquid mass of networks, corruptions and evasions – elusive yet instantly recognisable to members – which has ordered the politics and social psychology of Russian civilisation since tsarist times.

And here’s the super gut punch:

This is the genius of sistema: even if you manage to avoid the draft, you, your mother and your family have become part of the network of bribery, fear, simulation and dissimulation. You have learned to become an actor playing different roles in relation to the state, the great intruder you wish to avoid or outwit or simply buy off. You are already semi-legal, a transgressor, but that’s fine for sistema: as long as you only simulate, you will never do anything real, you will always look for compromise and you will feel just the right amount of discomfort. You are now part of the system. If a year in the army is the overt process that binds young Russians to the nation, a far more powerful induction comes with the rituals of avoiding military service.

Posted onApril 10, 2013|Comments Off on A Diplomatic Way Of Saying A BRICS Development Bank Is A Stupid Idea

Dani Rodrik has this in Project Syndicate today:

It can be cause only for celebration that the world’s largest developing economies are regularly talking to each other and establishing common initiatives. Nonetheless, it is disappointing that they have chosen to focus on infrastructure finance as their first major area of collaboration.

This approach represents a 1950’s view of economic development, which has long been superseded by a more variegated perspective that recognizes a multiplicity of constraints – everything from poor governance to market failures – of varying importance in different countries. One might even say that today’s global economy suffers from too much, rather than too little, cross-border finance.

What the world needs from the BRICS is not another development bank, but greater leadership on today’s great global issues. The BRICS countries are home to around half of the world’s population and the bulk of unexploited economic potential. If the international community fails to confront its most serious challenges – from the need for a sound global economic architecture to addressing climate change – they are the ones that will pay the highest price.

Yet these countries have so far played a rather unimaginative and timid role in international forums such as the G-20 or the World Trade Organization. When they have asserted themselves, it has been largely in pursuit of narrow national interests. Do they really have nothing new to offer?

Sometimes news editors exercise such brain-dead judgment that it’s a wonder journalism as a practice even survives.

That sentence was one of a few I conjured up as a possible lead-off thought. Well, technically, it was the only sentence, since the rest are thoughts posed as questions. Here they are:

Is the BRICS Durban conference officially the acronym’s 14th minute of fame?

When will the country grouping of France, Uganda, Chad, Kenya, Oman, Fiji and Finland finally supplant the BRICS as the political economy cadre du jour? What about Bulgaria, Uganda, Lithuania, Latvia, Spain, Haiti, Italy and Thailand?

Does anyone honestly still believe in the BRICS as an investment theme?

Am I the only one seeing that Brazil, Russia, India, China and South Africa may actually have less in common than a brain, an athlete, a basket case, a princess and a criminal?

What drives this apparently human need to shrink everything down into bite-sized archetypal infonuggets?

Posted onAugust 7, 2012|Comments Off on The Revolution Will Be Merchandised: In Memory of the Hungry Duck

The New York Times had a story out on the revival of the legendary Hungry Duck nightclub in Moscow. I’ve mentioned the Hungry Duck previously, but this paragraph buried near the bottom of the Times article caught my eye and has prompted me into a reaction:

Today, the Hungry Duck has been reincarnated as a monument to itself — a carefully considered multitiered sports bar with industrial-chic trappings. The toilets are covered with kitschy Soviet propaganda posters, and the toilet seats are chained to the walls. There is a gift shop.

Ah, the gift shop. Like CBGB’s, the Fillmore West, the Rolling Stones and other such zeit-culture snapshots of the moment, the Hungry Duck has entered the realm of what a friend of mine who works in the concert promotion business refers to as “the heritage tour”—one last gasp (grasp?) to essentially monetize what is now a ghost by any other name.

I thought this an appropriate time to add my own eyewitness account to the record. I went to the Hungry Duck a couple times in late 1997. If you do a simple Google search for “Hungry Duck” (note the photo search results in particular), that should give you enough of an idea of the obvious if you’re looking for that sort of account.

Otherwise, the truth is that period of my life is a bit fuzzy, but living in Russia was so far removed from the sort of life I had imagined for myself as a 23-year old that I felt compelled to keep a journal. I finally transferred this journal to my hard drive during a big housecleaning effort I went through last year after my father passed away. So I’ve just spent some time looking through some of those scribblings and it has brought back a couple memories. Other things I’ve written in there…well, I know it’s my writing, but I honestly just don’t remember some of this stuff. In any event, here’s what I can tell you about what’s in my notes and what little I actually remember of being in there:

Posted onMay 15, 2012|Comments Off on 3 Reasons The Russian Ruble Is The Least Risky Investment Under Putin 2.0

As if to complement the return of Vladimir Putin to Russia’s presidency, the Russian ruble last week returned to exactly the same level as two years ago:

As Putin 2.0 gets underway, I thought this a timely opportunity to review how the ruble has arrived at today’s exchange rate and where we should expect it to go from here. Read the rest of the article at Seeking Alpha here.

Related listening: Business Monitor International’s Risk Watchdog discusses the political elements of the Putin 2.0 modernization drive here. Particularly relevant is that BMI is expecting Brent crude average price for this year to be $150.

I became conscious of the phrase “Emerging Markets” sometime in the 1990s. I don’t remember the first time I heard the phrase, but it was certainly on my radar by Clinton’s re-election. I was a 23-year old financial systems engineer in New York and had been assigned to London to manage a client relationship with the Emerging Markets “division” of the investment bank Credit Suisse First Boston. The big news of the moment in my universe was that the Thai government had just unpegged its currency, the baht, from the U.S. Dollar, thereby lighting the fuse for the Asian Financial Crisis of 1997.Continue reading →